{"id":18056,"date":"2026-01-23T14:04:26","date_gmt":"2026-01-23T22:04:26","guid":{"rendered":"https:\/\/www.wealthfront.com/blog\/?p=18056"},"modified":"2026-01-30T15:09:30","modified_gmt":"2026-01-30T23:09:30","slug":"sp500direct-results","status":"publish","type":"post","link":"https:\/\/www.wealthfront.com/blog\/sp500direct-results\/","title":{"rendered":"How Wealthfront\u2019s S&P 500 Direct Helped Clients Save an Estimated $16M In Its First Year"},"content":{"rendered":"\n

It’s been a little over a year since we launched Wealthfront’s S&P 500 Direct, our first standalone direct indexing<\/a> product. We built this product to help clients generate tax savings while getting exposure to stocks within a popular stock market index. One year later, we’re excited to share a closer look at how S&P 500 Direct has already helped generate significant estimated tax savings for our clients while tracking the index very closely, all for a low 0.09% advisory fee\u2014the same as the expense ratio for SPY, one of the most widely used S&P 500\u00ae ETFs. <\/p>\n\n\n\n\n

Ready to upgrade your S&P 500 investing and unlock tax savings? <\/span>Learn more about S&P 500 Direct<\/span><\/a><\/div><\/div>\n\n\n\n

Here\u2019s how S&P 500 Direct performed in its first year. <\/p>\n\n\n\n

Estimated tax savings and tracking difference<\/h2>\n\n\n\n

If you\u2019re opening up an S&P 500 Direct account, you expect it to accomplish two main goals: Harvest losses that you can use to lower your tax bill, and offer similar performance to the underlying index. The product is designed to balance these two objectives and, ideally, achieve both. Results from our first year show that the product delivered on these goals: It generated over $16 million in estimated tax savings while delivering very similar returns to the index. <\/strong>Let\u2019s look at both of the goals in more detail.<\/p>\n\n\n\n

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  1. S&P 500 Direct unlocked valuable tax savings:<\/strong> From December 1, 2024 to November 30, 2025, S&P 500 Direct harvested nearly $46 million in losses across all accounts. Based on our clients\u2019 current self-reported income, state of residence, and tax-filing status, we infer a combined federal and state tax rate for each client\u2014and we can then multiply each client\u2019s rate by their harvested losses to calculate their total estimated tax savings. Using this method, we estimate S&P 500 Direct has saved clients over $16 million in taxes in its first year alone. On average, clients received estimated after-tax benefit equal to 4.54% of their S&P 500 Direct portfolio value. <\/strong><\/li>\n\n\n\n
  2. S&P 500 Direct offered very similar performance to the S&P 500\u00ae index: <\/strong>You should expect to see some performance differences (which could be either positive or negative) between S&P 500 Direct and the underlying index. Even so, they have been very small to date. These performance differences have three main causes: 1) the fact that the product is balancing two goals at once (tracking the index and conducting tax-loss harvesting), 2) account size, because smaller portfolios will hold fewer stocks compared to much larger ones, and 3) any stock exclusions a client might have requested (particularly if those exclusions include lots of large-cap stocks).  As you can see in the table below, S&P 500 Direct delivered very similar performance to SPY (a popular S&P 500\u00ae ETF) and the index itself (although indices are not investable and would not include management fees).<\/li>\n<\/ol>\n\n\n\n
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    The chart below shows cumulative return for the index, SPY, and all S&P 500 Direct accounts. As you can see, all three lines are so close together that it\u2019s fairly hard to distinguish between them. This is what low tracking difference looks like. <\/strong>To make the very close correlation easier to see, the second graph zooms in on the final month of this period.<\/p>\n\n\n\n

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    Who is likely to get the most benefit from S&P 500 Direct?<\/h2>\n\n\n\n

    At Wealthfront, we often say that tax-loss harvesting is likely to have the most benefit for long-term investors in high tax brackets\u2014and this is also true of S&P 500 Direct. <\/p>\n\n\n\n

    We\u2019ll illustrate why, all else being equal, a higher marginal tax rate translates into more potential tax savings with a very simplified example. Let\u2019s imagine you\u2019ve harvested $10,000 of losses and will be able to use all of them in the same tax year. You can calculate estimated tax savings by multiplying your harvested losses by your marginal tax rate. So:<\/p>\n\n\n\n